LULULEMON Athletica increased its full-year forecasts on Thursday (Dec 5), betting on resilient demand for its athletic wear in the US during the holiday shopping season and continued strength in its international business.
The company’s shares rose about 8 per cent in extended trading, with Lululemon approving an increase of US$1 billion to its stock repurchase programme.
Lululemon, like its peers, has had to keep its foot on the pedal when it comes to introducing fresh colours and prints to keep consumers engaged amid stiff competition from newer brands.
“We are pleased with our business over the extended Thanksgiving weekend,” Lululemon’s CEO Calvin McDonald said on a post-earnings call.
The company now expects fiscal year 2024 revenue between US$10.45 billion and US$10.49 billion, compared with its prior forecast range of US$10.38 billion to US$10.48 billion.
“It seems they are overcoming some of the product problems they had earlier this year with the merchandise,” Morningstar analyst David Swartz said.
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“A lot of the growth is coming from the international business right now. I think they are doing really well in China.”
Lululemon has benefited from its more targeted approach in its second-largest market China, where it has about 130 stores. The company works with local fitness instructors, social media influencers and markets its products through health and wellness events in the country.
Revenue from China rose 36 per cent in the third quarter, on a constant-currency basis, following an increase of 37 per cent in the second quarter.
On an adjusted basis, Lululemon earned US$2.87 per share in the third quarter, beating estimates of US$2.69. Its gross margins rose 150 basis points.
Lululemon raised its annual diluted earnings per share forecast to between US$14.08 and US$14.16, from its prior range of US$13.95 to US$14.15. REUTERS
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